Thinking about saving for your child’s future?

Setting aside money now is a smart way to help secure their financial future and teach them valuable lessons about managing money.

Every parent wants to give their child the best possible start, but what are the most effective ways to invest for them? Let’s explore some of the top options!

1. Bank or Building Society Accounts

Opening a children's savings account at a bank or building society is a great first step. Unlike some ISAs, these accounts offer instant access to funds, making it easier for your child to manage their money.

Giving your child control early on helps them build healthy savings habits. Generally, there’s no tax on these accounts, but if your child earns over £100 in interest from money you’ve deposited, taxes may apply if the interest exceeds your personal savings allowance.

2. Junior ISAs

Introduced in 2011 to replace the Child Trust Fund, Junior ISAs are tax-free savings accounts for children under 18. There are two types: cash ISAs, which allow interest to grow tax-free, and stocks & shares ISAs, where investments grow without tax on the gains. The annual contribution limit for the 2016/17 tax year is £4,080.

While your child can take control of the account at 16, they can’t withdraw funds until they’re 18. A Junior ISA is great if you're confident in your child’s financial management, but if you're worried about them spending it all when they turn 18, consider other options.

3. National Savings & Investments Children’s Bonds

These bonds offer guaranteed returns with fixed interest rates for five years, and the interest is tax-free. Backed by the government, they are considered a secure investment, though they may not offer the highest returns. Be aware that early withdrawal incurs penalties.

4. Trusts

A trust is a legal arrangement where you place assets under the management of a trustee, who then manages them on behalf of your child (the beneficiary). There are different types of trusts—such as a bare trust, which gives the beneficiary control at 18, or a discretionary trust, where the trustee decides how and when the assets are distributed. Trusts can be a more flexible and structured way to pass on wealth.

5. Junior Self-Invested Personal Pension (SIPP)

Although your child's retirement may feel far away, opening a Junior SIPP could be a long-term investment strategy. Junior SIPPs offer 20% tax relief, meaning if you contribute £2,880 annually, it will be boosted to £3,600. However, the money can't be accessed until your child is 55, and it is subject to market fluctuations, meaning the value could rise or fall over time.

Saving regularly, even in small amounts, can lead to significant growth over time. Whether you’re looking for short-term or long-term solutions, there are several options to help secure your child’s financial future. Ready to start saving today?

How to Invest for Beginners (2025)

Video by Ali Abdaal